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Monday, 29 June 20
INDIA COAL IMPORT OUTLOOK: WEAK DEMAND, IMPORT SUBSTITUTION, EXPECT 20% YOY DECLINE - GHEE PEH | IEEFA
 For India, the coal demand indicators have clearly turned negative.
According to Argus Media, since the government declared a nationwide lockdown on 25 March, the country’s daily average power output has been 20% lower than the three-year seasonal average. It estimates power sector coal usage may have fallen by as much as 10mt of NAR 5,000 kcal/kg-equivalent coal to 30mt in April. McCloskey Coal reports that India’s coal stockpile is at 165mt and that nearly half (80mt) is at CIL and other mines. This amount represents 30 to 40 days use. Power plant stocks were at 50mt,which is enough for 29 days. Other indicators, such as imports, domestic coal output, and power and steel output, all point to a large year-on-year decline for India’s coal imports.
Industry observers expect a 20%year-on-yearfall in 2020 India’s coal imports. This is in line with our forecast, but we believe there may be further downside risks. As a result of these, IEEFA expects India to import less Indonesian coal, based on our evaluation of the following four key variables:
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Coal imports: After recording year-on-year growth for January, coal imports experienced year-on-year declines for three months, with March and April down 28% and 29%, respectively.
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Domestic coal production: Coal production from CIL, the largest producer, increased 9.5% year-on-year for the first quarter of 2020.
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Power generation: Thermal power generation fell 1.5% year-on-year in the first quarter of 2020 and total power generation was down 32% year-on-year in April.
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Steel output: From January to April, output was down 20% year-on-year, with April declining 65% year-on-year.
Unlike China, where January to April 2020 coal imports rose, Indian coal imports for the same period were down 18% year-on-year. India’s coal imports have recorded year-on-year declines since February as COIVD-19 disrupted consumption and even the logistics of coal. This is despite average monthly coal benchmark prices falling at least 29% year-on-year over the same period.
According to media reports, CIL’s first quarter of 2020coal production increased 9.5% year-on-year. Although this slowed down to a daily rate of 1.3mt for the first 22 days of April, down 11% year-on-year, these strong gains are bad news for coal exporters to India. The Indian Government has announced measures that are similar to the Chinese Government’s coal import quota. In May, CIL was mandated to replace 100mt (40% of CY2019 coal imports) with domestic non-coking coal for the 2020–21 fiscal year.
For the period January to April2020, India’s total power output was down 7.4% year-on-year and its first quarter 2020 thermal power output was down 1.5% year-on-year. We note that total power output recorded an 8.2% year-on-year decline for March and thermal power output fell 12.9% year-on-year. In April, total power output was down 32.4% year-on-year. Data for thermal power output is not yet available but should also be significantly down, in line with total power output.
These falls would be consistent with the year-on-year decline in coal imports since February and the build-up of stockpiles at CIL and power plants.
India’s steel output acts as an indicator of economic activity. Between January and April, February was the only month that recorded a year-on-year rise in steel output, a modest 1.5%. Steel output recorded year-on-year declines of 13.8% in March and 65.2% in April, due to the full month of lockdown that started on 25 March. Against the backdrop of an increase in domestic coal production in the first quarter of 2020, a build-up of coal stockpiles and a fall in power generation, this level of economic activity presents significant downside risks to India coal imports.
The Indian Government has adopted a policy that supports its domestic coal sector, calling for import reductions. In May 2020, CIL was mandated to replace 100mt of coal (40% of CY 2019 coal imports) with domestic non-coking coal for the 2020–21 fiscal year. CIL’s first quarter 2020 output grew 9.5% year-on-year, presenting a significant risk to Indian coal imports. The risk is greater for Indonesia, because it exports mainly thermal coal. We believe India may have to continue importing coking coal for steel making because its domestic producers mainly supply thermal coal. Industry observers have estimated a 20% year-on-year decline in India’s coal imports. We agree, but also warn that there is a risk of a larger fall.
About IEEFA
The Institute for Energy Economics and Financial Analysis (IEEFA) examines issues related to energy markets, trends and policies. The Institute’s mission is to accelerate the transition to a diverse, sustainable and profitable energy economy. www.ieefa.org
About the Author Ghee Peh
Financial Analyst
Ghee Peh has worked in investment research since 1995, including at Jefferies, BNP Paribas, and UBS. He has covered Asian coal, cement and metal companies.
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Thursday, 07 May 20
UKRAINE PRODUCES 2.5 MLN TONNES OF COAL IN APRIL - UKRINFORM
Ukraine produced 2.5 million tonnes of coal in April 2020, which is 39% less than planned, according to the Coal Miners Union of Ukraine.
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Thursday, 07 May 20
INDIA: GOVT TO DO AWAY WITH MANDATORY WASHING OF COAL FOR THERMAL POWER UNITS - BUSINESS STANDARD
The Centre is planning to do away with the mandatory requirement of washing of coal before it is transported to thermal power stations. The Ministr ...
Thursday, 07 May 20
CIL'S SUPPLY TO POWER SECTOR FALLS IN MARCH AMID SLUMP IN COAL DEMAND - PTI
The supply of coal to the power sector by state-owned CIL registered a decline of eight per cent to 42.30 million tonne in March in the wake of slu ...
Thursday, 07 May 20
COAL PRICE REFERENCE FALL SHARPLY IN MAY 2020 DUE TO CORONAVIRUS OUTBREAK
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
Wednesday, 06 May 20
KOSPO INVITED COAL BIDS FOR LOW CALORIFIC VALUE COAL
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for 160,000 Metric Tons (MT) Low Calorific Value Coal for J ...
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- MS Steel International - UAE
- Trasteel International SA, Italy
- Latin American Coal - Colombia
- Central Java Power - Indonesia
- Meenaskhi Energy Private Limited - India
- South Luzon Thermal Energy Corporation
- Leighton Contractors Pty Ltd - Australia
- Interocean Group of Companies - India
- Parliament of New Zealand
- Antam Resourcindo - Indonesia
- Heidelberg Cement - Germany
- Power Finance Corporation Ltd., India
- Romanian Commodities Exchange
- Binh Thuan Hamico - Vietnam
- Vedanta Resources Plc - India
- Maharashtra Electricity Regulatory Commission - India
- ICICI Bank Limited - India
- Semirara Mining and Power Corporation, Philippines
- Indika Energy - Indonesia
- Wood Mackenzie - Singapore
- Energy Link Ltd, New Zealand
- Siam City Cement - Thailand
- Videocon Industries ltd - India
- Kapuas Tunggal Persada - Indonesia
- Straits Asia Resources Limited - Singapore
- Baramulti Group, Indonesia
- Coastal Gujarat Power Limited - India
- Global Coal Blending Company Limited - Australia
- GN Power Mariveles Coal Plant, Philippines
- Rio Tinto Coal - Australia
- Chettinad Cement Corporation Ltd - India
- Bhoruka Overseas - Indonesia
- Goldman Sachs - Singapore
- Sarangani Energy Corporation, Philippines
- Standard Chartered Bank - UAE
- Aditya Birla Group - India
- Orica Australia Pty. Ltd.
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Lanco Infratech Ltd - India
- San Jose City I Power Corp, Philippines
- Edison Trading Spa - Italy
- Vizag Seaport Private Limited - India
- Alfred C Toepfer International GmbH - Germany
- PNOC Exploration Corporation - Philippines
- PTC India Limited - India
- Indian Energy Exchange, India
- Posco Energy - South Korea
- Timah Investasi Mineral - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Holcim Trading Pte Ltd - Singapore
- Port Waratah Coal Services - Australia
- Cigading International Bulk Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- CNBM International Corporation - China
- Kalimantan Lumbung Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Maheswari Brothers Coal Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Eastern Energy - Thailand
- VISA Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Mercator Lines Limited - India
- Sree Jayajothi Cements Limited - India
- Miang Besar Coal Terminal - Indonesia
- IEA Clean Coal Centre - UK
- Deloitte Consulting - India
- Manunggal Multi Energi - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Star Paper Mills Limited - India
- Australian Commodity Traders Exchange
- Riau Bara Harum - Indonesia
- Kepco SPC Power Corporation, Philippines
- Ministry of Transport, Egypt
- IHS Mccloskey Coal Group - USA
- ASAPP Information Group - India
- Bhatia International Limited - India
- Therma Luzon, Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Kaltim Prima Coal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Mintek Dendrill Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Karaikal Port Pvt Ltd - India
- Dalmia Cement Bharat India
- Ministry of Mines - Canada
- Meralco Power Generation, Philippines
- The University of Queensland
- LBH Netherlands Bv - Netherlands
- Directorate Of Revenue Intelligence - India
- Oldendorff Carriers - Singapore
- Uttam Galva Steels Limited - India
- Billiton Holdings Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- SMC Global Power, Philippines
- Eastern Coal Council - USA
- Globalindo Alam Lestari - Indonesia
- Sical Logistics Limited - India
- White Energy Company Limited
- Ambuja Cements Ltd - India
- Anglo American - United Kingdom
- Mjunction Services Limited - India
- Indonesian Coal Mining Association
- Planning Commission, India
- Tamil Nadu electricity Board
- Toyota Tsusho Corporation, Japan
- Carbofer General Trading SA - India
- The State Trading Corporation of India Ltd
- Gujarat Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- GVK Power & Infra Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- OPG Power Generation Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sojitz Corporation - Japan
- Medco Energi Mining Internasional
- TeaM Sual Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Altura Mining Limited, Indonesia
- Commonwealth Bank - Australia
- Indian Oil Corporation Limited
- GAC Shipping (India) Pvt Ltd
- Siam City Cement PLC, Thailand
- PowerSource Philippines DevCo
- Bulk Trading Sa - Switzerland
- Singapore Mercantile Exchange
- Price Waterhouse Coopers - Russia
- Gujarat Sidhee Cement - India
- Tata Chemicals Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Business Power Corporation, Philippines
- Wilmar Investment Holdings
- Karbindo Abesyapradhi - Indoneisa
- Intertek Mineral Services - Indonesia
- Coal and Oil Company - UAE
- Energy Development Corp, Philippines
- Borneo Indobara - Indonesia
- Jindal Steel & Power Ltd - India
- Africa Commodities Group - South Africa
- Kobexindo Tractors - Indoneisa
- Independent Power Producers Association of India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coalindo Energy - Indonesia
- Australian Coal Association
- Agrawal Coal Company - India
- Metalloyd Limited - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Thiess Contractors Indonesia
- Cement Manufacturers Association - India
- CIMB Investment Bank - Malaysia
- Bayan Resources Tbk. - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- New Zealand Coal & Carbon
- Bhushan Steel Limited - India
- Bukit Makmur.PT - Indonesia
- Sakthi Sugars Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Makarim & Taira - Indonesia
- Kideco Jaya Agung - Indonesia
- Electricity Generating Authority of Thailand
- Georgia Ports Authority, United States
- Minerals Council of Australia
- McConnell Dowell - Australia
- Ministry of Finance - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Central Electricity Authority - India
- Orica Mining Services - Indonesia
- Sindya Power Generating Company Private Ltd
- Bangladesh Power Developement Board
- SMG Consultants - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Madhucon Powers Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Aboitiz Power Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Simpson Spence & Young - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- European Bulk Services B.V. - Netherlands
- Merrill Lynch Commodities Europe
- Indo Tambangraya Megah - Indonesia
- Formosa Plastics Group - Taiwan
- Indogreen Group - Indonesia
- Iligan Light & Power Inc, Philippines
- Renaissance Capital - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining Corp, Philippines
- Thai Mozambique Logistica
- Bharathi Cement Corporation - India
- Marubeni Corporation - India
- Kartika Selabumi Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- Economic Council, Georgia
- Malabar Cements Ltd - India
- Jaiprakash Power Ventures ltd
- Parry Sugars Refinery, India
- Mercuria Energy - Indonesia
- India Bulls Power Limited - India
- Chamber of Mines of South Africa
- Xindia Steels Limited - India
- Electricity Authority, New Zealand
- Grasim Industreis Ltd - India
- Attock Cement Pakistan Limited
- TNB Fuel Sdn Bhd - Malaysia
- Petron Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Pendopo Energi Batubara - Indonesia
- GMR Energy Limited - India
- Banpu Public Company Limited - Thailand
- The Treasury - Australian Government
- Larsen & Toubro Limited - India
- London Commodity Brokers - England
- Ind-Barath Power Infra Limited - India
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